The EIA raised its US oil production forecast to an average of 9.3 million barrels per a day (bpd) in 2017 and 10 million bpd in 2018 while it lowered its projection for average oil prices in 2017 to $52.60 a barrel for Brent and $50.68 for WTI.
After a report on Wednesday that Saudi Arabia would cut the supply as OPEC is trying to counter rising output of the U.S.is threatening to sabotage its efforts to end a sustained global crude oversupply, the oil prices rose.
Essentially, what we are looking at is an overall drawdown in crude oil over the last couple of weeks, but it's just being converted to gasoline. U.S. West Texas Intermediate crude was up 29 cents, or 0.6 percent, at $46.17 a barrel.
Crude oil prices gained on Thursday as investors were buoyed by falling inventories in the United States and higher-than-expected supply cuts to Asia by Saudi Arabia.
"We saw the biggest draw in inventories for the year last week with stockpiles down more than 5-million barrels".
OPEC is curbing its output by about 1.2 million barrels per day (bpd) from January 1 for six months, the first reduction in eight years, to clear excess supply.
Brent was 70 cents higher at $50.92 a barrel by 0945 GMT. "It is a sign of relative weakness even as OPEC and Russian Federation show commitment to continue with the [production cut] deal for six months and beyond".
Oil prices extended their gains after a report showed USA crude stockpiles fell by the biggest margin since December and were down for the fifth straight week.
In recent market action, light, sweet crude futures for delivery in June climbed 57 cents, or 1.2%, to $47.90 a barrel on the New York Mercantile Exchange.
U.S. crude production is expected to rise by more than previously expected in 2017 to 9.31 million barrels per day from 8.87 million bpd in 2016, a 440,000 bpd increase, the U.S. Energy Information Administration (EIA) said.
WTI has fallen about 12.6% so far this year as talk of OPEC extending its production cut through the end of the year has failed to provide support.
Aramco and other producers typically issue monthly notices to refineries and other buyers with contracted supplies outlining their intended allocations to each customer.
The cartel raised its estimate of total oil supply growth from non-OPEC producers this year to 950,000 bpd from a previous forecast of 580,000 bpd.